Google grows in Latin America

November 26th, 2008 By Liza Gross in Technology / Business

John Farrell, 38, thinks of his job at Google as "a fantastic journey." It is pretty hard to argue the point if, like Farrell, your title is country director, Google Mexico, and director of business development for Google in Latin America at a time when the region represents the fastest-growing segment in revenues and number of searches for the Internet company, based in Mountain View, Calif.

While Google's growth slowed in the third quarter, the company reported a 26 percent jump in net income. More significantly, 50 percent of its revenue is coming from its overseas operation, although Google did not break down this result geographically.

Google began its expansion into Latin America three years ago, attracted by the growing infrastructure for high-speed Internet access, the popularity of e-commerce and certain unique habits of Latin American users.

The first step was the purchase of Brazil's Akwan Information Technologies in July 2005. Akwan, based in Belo Horizonte, offered search services to Brazilian companies and became Google's research and development center for Latin America.

In November of that year, Google announced it was opening operations centers in Sao Paulo and Mexico City.

In April 2007, Google opened an office in Buenos Aires, which was billed by the corporation as "the third-largest headquarters of Google business development in the world, after those in California and Ireland."

The company also now has a presence in Chile and Colombia and employs about 1,000 people in the region.

Farrell's mandate is to continue to expand Google's presence in Latin America. He is based in Mexico City, where he plans to open bigger offices in 2009. He spoke with The Miami Herald in New York City, where he was a panelist in LatinVision, a conference on the future of Latin entertainment, media and technology markets held Oct. 15.

Q. What part of the business does Latin America represent for Google?

A. We are seeing triple-digit growth. For example, we launched direct sales in Mexico four years ago and we have seen 50 percent to 100 percent growth year over year since then. Also in that period we have increased penetration 20 percent in most markets in Latin America. We have users in all markets.

Our ambition is organizing all the world's information and making it accessible and usable. Right now we have 80 percent of the total searches in the region.

When we have the users, because they trust us, the other side is the advertisers. They look to deliver messages and through our technology we give them metrics they cannot get anywhere else. So it's users and advertisers and our content partners. We need to strike agreements so that third parties can provide us archives. Google will never produce content. It's not in our DNA.

Q. How about Latin American Internet users? Are there ways in which they are different from others?

A. Mexico and Brazil are the biggest consumers of YouTube in the world in absolute terms. People like to be entertained. They are using it as a video social network. We have cases where people have become celebrities through word of mouth.

Orchid, a Google-owned social network, is visited by 80 percent of Internet users in Brazil.

We are concerned about privacy issues. There is more that we could do to protect privacy. But if you don't want to share, don't put it up. Before you upload a video, you see terms and conditions. We warn you. You don't go out to public places and give out your information. You shouldn't do that on e-mail.

Q. What solutions are you giving advertisers? And what does the panorama look like in Latin America?

A. We are making a big bet on display advertising through interactive ads. We display sponsored links. The advertisers only pay us when there is a click that takes the user to the link.

There is a lot of room to grow in the arena of advertiser solutions in Latin America. The challenge we face is evangelization. Fifteen percent of the U.K. advertising market is going online. In the U.S., it's 10 to 12 percent. In Latin America it is 2 to 3 percent.

Our challenge is to educate advertisers. Compared to other media, you are getting ROI (return on investment). In Latin America, 60 percent of appliance purchases are researched online. Online media is not there to replace other media. It's a complement.

GM is a great client in Latin America, as are airlines, hotels, Expedia and e-retailers like Mercado Libre.

Q. How about deals with Latin American content providers?

A. There's so much valuable content. We can make it discoverable. We can place advertising against those searches. That's the revenue model. We help in the digitalization. We are experts at that. We look for a model where Google, the newspapers and the users win.

Some projects are under way in Latin America, but I can't comment on them because they are still in the very early stages.

Q. What are Google's plans for Latin America in 2009? What products and services will you be launching?

A. We have a pretty ambitious road map. We already have some presence of Google Maps in Brazil, but we will increase that and launch Google Maps Mexico. Another launch will be Google Chrome, our new browser. It was launched in September in Mexico, and you can download it for free.

We will open bigger offices in Mexico City in January.

And mobile phones are a huge opportunity. It's the biggest market ever known to man: 1 billion with Internet access through their mobile unit.

Android is our wireless operating system. This is a bet for Google that users can access the Internet directly without going through carriers. Android is like iPhone, but open. It will foster a new era of innovation. Think about searching for a movie and advertisers can have a dialogue with you after you search, offering you free popcorn or telling you which theater is closer. We are in talks to bring Android to Mexico, including with Mr. (Carlos) Slim.

___

© 2008, The Miami Herald.
Visit The Miami Herald Web edition on the World Wide Web at http://www.herald.com/
Distributed by McClatchy-Tribune Information Services.